U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D. C. 20549

                                   FORM 10-QSB

(Mark One)

   X        Quarterly report pursuant to Section 13 or 15(d) of the Securities
-------                        Exchange Act of 1934
               For the quarterly period ended December 31, 2001 or
-------     Transition report  pursuant  to  Section  13  or  15(d)  of  the
               Securities Exchange Act of 1934 For the transition
                         period from ________to________


Commission File No. 0-13836


                          SILICON VALLEY RESEARCH, INC.
                          -----------------------------
        (Exact name of small business issuer as specified in its charter)


              California                                       94-2743735
--------------------------------------------------------------------------------
     (State or other jurisdiction of                          (IRS Employer
     incorporation or organization)                          Identification No.)


6293 San Ignacio Avenue   Suite 201        San Jose, CA        95119-1231
--------------------------------------------------------------------------------
(Address of principal executive offices)                       (Zip Code)

                                 (408) 361-0333
--------------------------------------------------------------------------------
               Registrant's telephone number, including area code


--------------------------------------------------------------------------------
              (Former name, former address and former fiscal year,
                         if changed since last report.)

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed  by  Section  13 or 15 (d) of the  Securities  Exchange  Act of 1934
during the preceding 12 months (or for such shorter  period that the  Registrant
was  required  to file such  reports),  and (2) has been  subject to such filing
requirements for the past 90 days.

                                     YES X             NO___
                                        ---

State the number of shares outstanding of each of the Issuer's classes of common
equity, as of the latest practicable date.

            Common Shares Outstanding at February 6, 2002: 44,466,590

Transitional Small Business Disclosure Statement Format (Check One) YES    NO X
                                                                       ---   ---
                                  Page 1 of 22

<PAGE>



                 SILICON VALLEY RESEARCH, INC. AND SUBSIDIARIES

                                      INDEX


<TABLE>
<CAPTION>
                                                                                                            Pages
                                                                                                            -----
<S>               <C>                                                                                       <C>
Part I.           FINANCIAL INFORMATION

                  Item 1.      Financial Statements

                      Consolidated Balance Sheet -
                          December 31, 2001 (unaudited)                                                         3

                      Consolidated Statements of Operations -
                          Three and Nine Months Ended December 31, 2001 and 2000 (unaudited)                    4

                      Consolidated Condensed Statements of Cash Flows -
                          Three and Nine Months Ended December 31, 2001 and 2000 (unaudited)                    5

                      Notes to Consolidated Financial Statements                                             6-10

                  Item 2.      Management's Discussion and Analysis of
                               Financial Condition and Results of
                               Operations                                                                   11-19

                  Item 3.      Quantitative and Qualitative Disclosures About Market Risk                      19

Part II.          OTHER INFORMATION                                                                         20-22

                  Item 1       Legal Proceedings
                  Item 2       Changes in Securities and Use of Proceeds
                  Item 3       Defaults Upon Senior Securities
                  Item 4       Submission of Matters to a Vote of
                               Securities Holders
                  Item 5       Other Information
                  Item 6       Exhibits and Reports on Form 8-K

                  Signatures                                                                                   23
</TABLE>

                                  Page 2 of 22
<PAGE>


                          PART I. FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

                 SILICON VALLEY RESEARCH, INC. AND SUBSIDIARIES
                           Consolidated Balance Sheet
                                   (Unaudited)
                                 (In thousands)

Assets                                                       December 31, 2001
                                                             -----------------

Current Assets:
     Cash and cash equivalents                                  $      8
     Accounts receivable, net of allowances of $50                    53
     Prepaid expenses and other current assets                        69
                                                                --------
                                                                     130

Fixed assets, net                                                    117
Other assets, net                                                    156
                                                                --------
                                                                $    403
                                                                ========

Liabilities and Shareholders' Equity

Current Liabilities:
     Notes payable                                              $     38
     Accounts payable                                                375
     Accrued expenses                                                463
     Deferred revenue                                                 30
                                                                --------
                                                                     906
                                                                --------

Long-term debt                                                       926
                                                                --------
Deferred tax liability                                                20
                                                                --------

Commitments and Contingencies (Note 9)

Shareholders' Equity:
Preferred stock, no par value:
     Authorized: 1,000 shares
     Issued and outstanding: none                                   --
Common stock, no par value:
     Authorized: 60,000 shares
     Issued and outstanding:
       44,244 shares                                              46,319
Accumulated deficit                                              (47,768)
                                                                --------
                                                                  (1,449)
                                                                --------
                                                                $    403
                                                                ========

        The accompanying notes are an integral part of these consolidated
                             financial statements.

                                  Page 3 of 22

<PAGE>


                 SILICON VALLEY RESEARCH, INC. AND SUBSIDIARIES
                      Consolidated Statements of Operations
                                   (Unaudited)
                      (In thousands, except per share data)

<TABLE>
<CAPTION>
                                                        Three Months Ended                  Nine Months Ended
                                                            December 31,                      December 31,
                                                        2001             2000               2001            2000
                                                        ----             ----               ----            ----
<S>                                                  <C>               <C>              <C>               <C>
Revenue:
     License fees and other                          $        9        $       60       $      216        $      645
     Maintenance and services                               195               356              751               801
                                                     ----------        ----------       ----------        ----------
     Total revenue                                          204               416              967             1,446
                                                     ----------        ----------       ----------        ----------
Cost of revenue:
     License fees and other                                   7                68              117               200
     Maintenance and services                                67               236              326               519
                                                     ----------        ----------       ----------        ----------
     Total cost of revenue                                   74               304              443               719
                                                     ----------        ----------       ----------        ----------
Gross margin                                                130               112              524               727
                                                     ----------        ----------       ----------        ----------

Operating expenses:
     Engineering, research and development                  148               177              542               546
     Selling and marketing                                   (4)               45              569               535
     General and administrative                             205               192              647               527
                                                     ----------        ----------       ----------        ----------
     Total operating expenses                               349               414            1,758             1,608
                                                     ----------        ----------       ----------        ----------

Operating loss                                             (219)             (302)          (1,234)             (881)
                                                     ----------        -----------      ----------        ----------

Other income (expense):
     Interest income                                         --                 1               --                 9
     Interest expense                                       (24)              (26)             (70)              (75)
     Other, net                                              --                --              --                (32)
                                                     ----------        ----------       ---------         -----------
     Total other income                                     (24)              (25)             (70)              (98)
                                                     -----------       -----------      ----------        -----------

Loss before provision for
     income taxes                                          (243)             (327)          (1,304)             (979)

Provision for income taxes                                   --                --               --                --
                                                     ----------        ----------       ----------        ----------
Net loss                                             $     (243)       $     (327)      $   (1,304)       $     (979)
                                                     ==========        ===========      ==========        ==========


Net loss per basic and diluted share                 $    (0.01)       $   (0.01)       $    (0.03)       $   (0.03)
                                                     ==========        ==========       ==========        =========

Weighted-average common shares
     outstanding (basic and diluted)                     43,329            37,283           42,159            36,133
                                                     ==========        ==========       ==========        ==========

</TABLE>

        The accompanying notes are an integral part of these consolidated
                             financial statements.

                                  Page 4 of 22

<PAGE>


                 SILICON VALLEY RESEARCH, INC. AND SUBSIDIARIES
                 Consolidated Condensed Statements of Cash Flows
                                   (Unaudited)
                                 (In thousands)

                                                             Nine Months Ended
                                                                December 31,
                                                              2001       2000
                                                            -------     -------
Cash Flows from Operating Activities:
Net loss                                                    $(1,304)    $  (979)
Adjustments to reconcile net loss to net
cash used in operating activities:
     Depreciation and amortization:
       Fixed assets                                              56          79
       Software licenses and development costs                  131         215
     Loss on sale of fixed assets                              --             9
     Write-off of bad debts                                     240         255
     Adjustment to bad debt reserve                             (35)       --
     Noncash compensation for stock option repricing             35        --
Changes in assets and liabilities, net:
     Accounts receivable                                        218        (373)
     Other receivable                                           149        --
     Prepaid expenses and other current assets                  123          14
     Accounts payable                                            42         (53)
     Accrued expenses                                           211         (52)
     Deferred revenue                                           (60)         (8)
     Other, net                                                  39          85
                                                            -------     -------

Net cash used in operating activities                          (155)       (808)
                                                            -------     -------

Cash Flows from Investing Activities:
Acquisition of fixed assets                                      (9)       (147)
Capitalization of software development costs and
         purchase of software licenses                          (60)        (34)
                                                            -------     -------

Net cash used in investing activities                           (69)       (181)
                                                            -------     -------

Cash Flows from Financing Activities:
Principal payments on short-term borrowings                    (148)       --
Proceeds from short-term borrowings                              13        --
Proceeds from issuance of common stock and warrants             264         293
                                                            -------     -------

Net cash provided by financing activities                       129         293
                                                            -------     -------

Effect of exchange rate changes on cash                        --          --
                                                            -------     -------

Net increase (decrease) in cash and
     cash equivalents                                           (95)       (696)
Cash and cash equivalents at beginning
     of period                                                  103         815
                                                            -------     -------

Cash and cash equivalents at end
     of period                                              $     8     $   119
                                                            =======     =======

        The accompanying notes are an integral part of these consolidated
                             financial statements.

                                  Page 5 of 22

<PAGE>


                 SILICON VALLEY RESEARCH, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          December 31, 2001 - Unaudited
                                 (In thousands)

Note 1:       Basis of Presentation and Financial Statement Information

        The accompanying consolidated financial statements have been prepared by
the Company pursuant to the rules and regulations of the Securities and Exchange
Commission for interim financial statements.  Therefore, they do not include all
the  disclosures  which were  presented in the  Company's  annual report on Form
10-KSB.  These financial  statements do not include all disclosures  required by
generally  accepted  accounting  principles and  accordingly,  should be read in
conjunction  with the  consolidated  financial  statements and notes included as
part of the  Company's  latest  annual report on Form 10-KSB for the fiscal year
ended March 31, 2001.

         In the opinion of management,  the  consolidated  financial  statements
include  all  adjustments  (consisting  only of  normal  recurring  adjustments)
necessary to present  fairly the  consolidated  financial  position,  results of
operations  and cash flows for the interim  period.  The  results of  operations
presented are not  necessarily  indicative of the results to be expected for the
full year or for any other period.

         The report of Moss Adams LLP on the Company's fiscal 2001  consolidated
financial  statements  dated  June 8, 2001  included  an  explanatory  paragraph
regarding the Company's ability to continue as a going concern.  There can be no
assurance  that the Company  will not  continue to incur  significant  operating
losses or that  required  additional  financing  will be  available  to meet the
Company's  business  plans in fiscal 2002 and beyond.  The Company has  incurred
significant  losses for the last two fiscal years from  operations  and does not
believe that cash and cash  generated  from  operations  will be  sufficient  to
finance operations  through fiscal 2002 without additional working capital.  The
Company is exploring  financing  alternatives  to supplement  its cash position.
Potential  sources of  additional  financing  include,  but are not  limited to,
private   equity   financings,   mergers,   strategic   investments,   strategic
partnerships  or various  forms of debt  financings.  The Company  has  recently
introduced  updated versions of its existing  products and has plans to continue
developing  enhanced  software  products.  There  can be no  assurance  that the
Company  will be able to  execute  additional  forms  of  financing  or that the
Company  will not incur  additional  losses until its  recently  introduced  and
existing products generate significant  revenue.  These events raise substantial
doubt  about  the  Company's  ability  to  continue  as  a  going  concern.  The
accompanying  financial  statements have been prepared assuming the Company will
continue  as a going  concern.  The  accompanying  financial  statements  do not
include  any   adjustments   that  might   result  from  the  outcome  of  these
uncertainties.

Note 2:       Earnings Per Share

         The Company has adopted Statement of Financial Accounting Standards No.
128 "Earnings per Share" (FAS 128).  Under FAS 128, the Company presents two EPS
amounts.  Basic EPS is calculated based on income or loss to common shareholders
and the  weighted-average  number  of shares  outstanding  during  the  reported
period.  Diluted EPS includes additional dilution from common stock equivalents,
such as stock  issuable  pursuant to the exercise of stock options and warrants.
Common  stock  equivalents  were not  included  in the  computation  of  diluted
earnings per share when the Company  reported a loss because to do so would have
been antidilutive for the periods presented.


                                  Page 6 of 22

<PAGE>

                 SILICON VALLEY RESEARCH, INC. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
                          December 31, 2001 - Unaudited
                                 (In thousands)

         The  following is a  reconciliation  of the  computation  for basic and
diluted EPS:

<TABLE>
<CAPTION>
                                               Three Months Ended       Nine Months Ended
                                                   December 31,           December 31,
                                                 2001       2000        2001       2000
                                                 ----       ----        ----       ----
<S>                                          <C>         <C>         <C>         <C>
Net loss                                     $   (243)   $   (327)   $ (1,304)   $   (979)

Weighted-average common shares
     outstanding (basic)                       43,329      37,283      42,159      36,133

Weighted-average common stock equivalents:
     Stock options                               --          --          --          --
     Warrants                                    --          --          --          --
Weighted-average common shares
     outstanding (diluted)                     43,329      37,283      42,159      36,133
</TABLE>

Note 3:       Comprehensive Income (Loss)

         The Company has adopted Statement of Financial Accounting Standards No.
130,  "Reporting  Comprehensive  Income." This Statement requires that all items
recognized under accounting standards as components of comprehensive earnings be
reported  in an  annual  financial  statement  that is  displayed  with the same
prominence as other annual  financial  statements.  This Statement also requires
that an entity classify items of other comprehensive earnings by their nature in
an annual financial statement.  Other comprehensive  earnings in these financial
statements include foreign currency translation adjustments. The Company's total
comprehensive earnings were as follows:

                                       Three Months Ended    Nine Months Ended
                                          December 31,         December 31,
                                         2001      2000       2001       2000
                                         ----      ----       ----       ----

Net loss                               $  (243)   $  (327)   $(1,304)   $  (979)
Other comprehensive (loss) gain           --         --         --         --
                                       -------    -------    -------    -------
     Total comprehensive loss          $  (243)   $  (327)   $(1,304)   $  (979)
                                       =======    =======    =======    =======

Note 4:       Statement of Cash Flows Information
                                                           Nine Months Ended
                                                             December 31,
                                                          2001          2000
                                                          ----          ----
Supplemental Cash Flow Information:
Cash paid during the period for:
     Interest                                            $     --        $42
     Income Taxes                                        $     --        $--
Non-cash investing and financing activities:
     Common stock issued in exchange for
        note payable                                     $     --        $74

                                  Page 7 of 22

<PAGE>

                 SILICON VALLEY RESEARCH, INC. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
                          December 31, 2001 - Unaudited
                                 (In thousands)

Note 5:         Balance Sheet Components
                                                              December 31, 2001
                                                              -----------------
Other Assets:
Software development costs                                         $ 1,047
Software licenses                                                      979
                                                                   -------
                                                                     2,026
Less accumulated amortization                                       (1,945)
                                                                   -------
                                                                        81
Goodwill                                                                61
Other                                                                   14
                                                                   -------
                                                                   $   156
                                                                   =======
Accrued Expenses:
Payroll and related costs                                          $   271
Taxes payable                                                           38
Interest payable                                                       146
Other                                                                    8
                                                                   -------
                                                                   $   463
                                                                   =======

Note 6:         Bank Borrowings and Long-Term Debt

         In January 2001,  the Company  entered into an Agreement  with its bank
for the purchase of the Company's  receivables.  The agreement provides that the
bank will purchase with recourse up to $250 of the Company's  domestic  accounts
receivable.  The bank will advance the Company 80% of qualified receivables.  In
the event that the Company's customers do not pay on the invoices within 90 days
of invoice date,  the Company may be required to return the amounts  advanced to
the bank.

         In June 1999, the Company began a subordinated  debt/warrant financing.
The financing included  approximately $1,000 of three-year notes and the sale of
approximately  8,000  Warrants  at $0.01  per  Warrant.  The debt  bears  simple
interest of 10% and the Warrants  have a five-year  term with an exercise  price
per share of $0.125. This financing  transaction  consists of two closings.  The
first  closing  took  place on June 7,  1999.  The  Company  received  $768 cash
proceeds from this closing.  This included $711 of three-year notes and the sale
of approximately 5,700 Warrants at $0.01 per Warrant.  The second closing was to
have taken place on July 15, 1999. The closing was extended until  September 24,
1999 pending negotiation of a workout with the Creditors'  Committee through the
Credit  Managers'  Association  to  resolve  accounts  payable  issues  that was
satisfactory to the majority of the investors.  An agreement was reached and the
Company received  approximately $312 cash proceeds from the second closing.  The
Company  has used  part of the  proceeds  from the  financing  to  complete  the
Settlement  Agreement with its lender and to pay other accounts payable and used
the balance of the proceeds to help fund its operations.  The Company's CEO, the
Company's  Chairman of the Board,  an  affiliate  of a Company  director and two
Company 10% shareholders participated in the financing.

Note 7:         Capital Stock

         In  October  2001,  the  Company  began a private  placement  of equity
securities.  The Company completed the private placement of 878 shares of Common
Stock on December  31,  2001,  with total  proceeds  to the Company of $49.  The
shares  of  Common  Stock  are  unregistered.  The  Company  agreed  to  file  a
registration  statement with the Securities and Exchange  Commission pursuant to
the terms of the stock purchase agreement.

                                  Page 8 of 22
<PAGE>

         The  Company  issued 780 shares of Common  Stock upon the  exercise  of
stock options, with total proceeds to the Company of $42.

Note 8:         Repricing of Stock Option

         In November  2001,  the Board of Directors  approved a  proposition  to
reduce the exercise  price of all  employees'  and  consultants'  stock  options
outstanding to $0.054 per share,  the fair market value of the Company's  common
stock as of November 19,  2001.  As a result of such  modification,  all options
eligible to the offer are subject to variable plan  accounting  until the option
is exercised,  cancelled or expired.  Any future  increase in stock market price
will result in additional compensation expense.

         For the quarter and nine months ended  December  31, 2001,  the Company
recorded $35 compensation expenses related to repricing of stock options.

Note 9:         Commitments and Contingencies

         As with  other  companies  in  industries  similar  to  Silicon  Valley
Research,  Inc.,  the  Company  is  subject  to the risk of  adverse  claims and
litigation  on a variety of  matters,  including  infringement  of  intellectual
property,  intentional and/or negligent  misrepresentation of material facts and
breach of fiduciary duties.

Note 10:        Legal Action

         The Company filed a complaint in the United States  District  Court for
the  Northern   District  of  California  on  August  10,  2001  against  Avant!
Corporation  and  certain  of its  employees  for unfair  competition,  tortious
interference,  false  advertising,  receipt  and  concealing  of  stolen  goods,
conspiracy and violations of federal racketeering laws. This civil action arises
out  of  Avant!'s  theft  of  computer  code  and  trade  secrets  from  Cadence
Corporation and use of those stolen products to compete with SVR.

         Avant!  Corporation recently was found guilty of theft of trade secrets
and conspiracy to steal and use the trade secrets of Cadence  Corporation during
the period of 1991 through  1998,  and of having  engaged in fraud and deceit in
the offer and sale of a security after entering a plea of no contest  thereto on
May 16, 2001. A restitution  award of approximately  $195 million was awarded to
Cadence Corporation in the criminal case, and Cadence is awaiting the lifting of
a stay in its civil suit against Avant! Corporation.

         The Company has  determined it necessary to undertake this legal action
in an attempt to recoup damages caused by Avant!'s  conduct,  including  damages
resulting  from sales of SVR place and route  software  lost  directly to Avant!
Corporation.  Avant!  Corporation  sold place and route  software that contained
Cadence  Corporation's  stolen  computer  code and  trade  secrets  head to head
against SVR's software, and this unfair advantage allowed Avant!  Corporation to
acquire a significant amount of the Company's sales and market share.

         SVR has retained David H. Donaldson, Jr. and Peter Kennedy of the Texas
law firm of George & Donaldson,  LLP and Craig Needham of the California firm of
Needham,  Davis,  Kirwan  &  Young,  LLP to  represent  it in this  matter  on a
contingency fee arrangement.

         Avant!  Corporation,  in  addition to filing its own Motion to Dismiss,
has also joined  Defendant  Stephen  Wuu's Motion to Dismiss,  moving to dismiss
each and all of SVR's claims against both parties.  On December 14, 2001,  Judge
Ronald Whyte heard  Avant!'s and Stephen Wuu's  Motions to Dismiss,  but did not
make a ruling  from the bench.  The judge could make a ruling in the future with
no further  input from either  parties,  or the judge could  request  additional
briefs and/or additional  hearings in the matter before making his ruling on the
Motions to Dismiss.  Additionally,  all parties have  stipulated  that they will
participate  in  the  Alternative   Dispute  Resolution  process  of  a  private
mediation, with the mediation provider to be determined.

         Management  believes  that the ultimate  resolution of the disputes and
litigation  matters  discussed above will not have a material  adverse impact on
the Company's financial position or results of operations.

Note 11:        Recent Accounting Pronouncements

         In  June  2001,  the  Financial   Accounting   Standards  Board  issued
Statements of Financial Accounting Standards No. 141, Business Combinations, and
No. 142,  Goodwill  and Other  Intangible  Assets,  effective  for fiscal  years
beginning after December 15, 2001. Under the new rules,  goodwill and intangible
assets deemed to have  indefinite  lives will no longer be amortized but will be
subject to annual  impairment  tests in accordance  with the  Statements.  Other
intangible  assets will continue to be amortized  over their useful  lives.  The
Company will apply the new rules on accounting for goodwill and other intangible
assets  beginning in the first  quarter of fiscal 2003.

                                  Page 9 of 22
<PAGE>

         The  Company  has not yet  determined  the  effect  resulting  from the
application of the nonamortization  provisions of the Statement on the earnings.
During the first quarter of fiscal year 2003, the Company will perform the first
of the required  impairment  tests of goodwill and indefinite  lived  intangible
assets as of April 1, 2002 and has not yet  determined  what the effect of these
tests will be on the earnings and financial position of the Company.

         In December  1999,  the SEC issued  Staff  Accounting  Bulletin No. 101
("SAB 101"),  "Revenue Recognition in Financial  Statements." SAB 101 summarized
certain of the SEC's views in applying generally accepted accounting  principles
to revenue recognition in financial  statements.  SAB 101 was adopted during the
year  ended  March 31,  2001.  The  adoption  of SAB 101 did not have a material
effect on the Company's financial position or results of operations.

                                  Page 10 of 22

<PAGE>



ITEM 2.                  MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                    FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                                 (In thousands)

         This  Management's  Discussion and Analysis of Financial  Condition and
Results of Operations  includes a number of  forward-looking  statements,  which
reflect  Silicon Valley  Research,  Inc.'s ("the Company" or "SVR") current view
with respect to future events and  financial  performance.  In this report,  the
words  "anticipates,"  "believes,"  "expects,"  "intends,"  "future,"  "may" and
similar expressions identify forward-looking statements. Some of the examples of
forward-looking  statements  in this report  include that barring a  substantial
increase in sales  activity,  we will run out of cash during the fourth  quarter
unless we conduct a financing or are successful in pursuing  other  alternatives
such as an acquisition or sale or license of our  technology,  that we will have
to defer pay to service providers during the fourth quarter of fiscal 2002 if we
do not obtain  additional  cash, that a possible source of cash is the potential
exercise of outstanding  warrants if our stock price increases,  that we plan to
release product upgrades and enhancements  and to increase  international  sales
and to rely on the services market. These and other  forward-looking  statements
are subject to certain risks and uncertainties, including those discussed in the
Other Factors Affecting Future Results section of this Item 2, elsewhere in this
Form 10-QSB, and as set forth in the Company's Form 10-KSB on file with the SEC,
that could cause actual results to differ materially from historical  results or
those  anticipated.  Readers are cautioned not to place undue  reliance on these
forward-looking statements, which speak only as of the date hereof. We undertake
no  obligation  to  publicly  release  the  results  of any  revisions  to these
forward-looking  statements which may be made to reflect events or circumstances
occurring  subsequent to the filing of the Form 10-QSB with the  Securities  and
Exchange Commission.

RESULTS OF OPERATIONS

REVENUE

         License revenue for the third quarter of fiscal year 2002,  which ended
December 31, 2001,  was $9, a decrease from $60 in the third quarter a year ago.
License  revenue for the nine-month  period ended December 31, 2001 decreased to
$216 from $645 over the nine-month  period ended December 31, 2000.  Maintenance
and  services  revenue for the third  quarter of fiscal  year 2002,  which ended
December  31, 2001 was $195,  a decrease  from $356 in the third  quarter a year
ago.  Maintenance and services revenue for the nine-month  period ended December
31, 2001  decreased to $751 from $801 for the  nine-month  period ended December
31,  2000.  The  decrease in revenue  from the same periods in the prior year is
primarily  due to a slowdown  in the  electronics  industry  and the  economy in
general.  In addition,  the tragic events of September  11th resulted in a sharp
decline in our sales  activity  during the quarter.  International  sales in the
third  quarter of fiscal year 2002 were $0. In the third quarter of fiscal 2001,
international  sales  comprised  8% of  total  revenue.  Prior to  fiscal  2000,
international  sales were made primarily in Japan and other countries in the Far
East.  Our plans for the  remainder  of fiscal 2002 and fiscal  2003  include an
aggressive new product plan, including new releases of significant  enhancements
for each of our primary  products,  as well as plans to  increase  international
sales.  However,  there  can  be  no  assurance  that  these  new  products  and
enhancements  will be released on a timely basis, if at all, or will gain market
acceptance  nor can  there  be any  assurance  that we will be able to  generate
material  international  sales.  We intend to continue  to rely on the  services
market going forward.  See "Other Factors Affecting Future Results-New  Products
and Rapid Technological Change; Risk of Product Defects".

         A substantial portion of the Company's revenues in each quarter results
from transactions  during the last month of that quarter.  For this reason among
others,   the   Company's   revenues  are  subject  to   significant   quarterly
fluctuations. If revenue levels are below expectations, operating results may be
materially  and adversely  affected.  In addition,  the Company's  quarterly and
annual  results may  fluctuate as a result of many  factors,  including  but not
limited to the size and timing of software  license fees and service  contracts,
timing  of   co-development   projects  with  customers,   timing  of  operating
expenditures,  increased competition,  new product announcements and releases by
the  Company  and its  competitors,  gain or loss of  significant  customers  or
distributors,

                                  Page 11 of 22
<PAGE>

expense levels, renewal of maintenance contracts, pricing changes by the Company
or its competitors,  personnel  changes,  foreign  currency  exchange rates, and
economic conditions generally and in the electronics industry specifically.

         The Company's expense levels are based, in part, on its expectations as
to future revenue levels, which are difficult to predict.

COST OF REVENUE

         Cost of license  fees and other for the third  quarter  of fiscal  year
2002 was $7 as compared to $68 in the third quarter of fiscal year 2001. Cost of
license  fees and other for the nine  months  ended  December  31, 2001 was $117
compared to $200 for the nine months ended  December 31, 2000.  Cost of sales of
license fees and other is primarily  the  amortization  of software  development
costs and is not a function of revenue.

         Cost of  maintenance  and services for the third quarter of fiscal year
2002 was $67 compared to $236 in the third quarter of fiscal year 2001.  Cost of
maintenance  and services  for the nine months ended  December 31, 2001 was $326
compared  to  $519  for  the  nine  months  ended  December  31,  2000.  Cost of
maintenance and services is primarily the cost of providing design services.

ENGINEERING, RESEARCH AND DEVELOPMENT EXPENSES

         Engineering, research and development expenses for the third quarter of
fiscal year 2002 were $148  compared to $177 in the third quarter of fiscal year
2001. Comparing the third quarter of fiscal 2002 and the third quarter of fiscal
2001,  engineering,  research and development expenses were 73% and 43% of total
revenue, respectively.  Engineering,  research and development expenses for nine
months ended  December  31, 2001 were $542  compared to $546 for the nine months
ended  December 31, 2000.  Comparing  these periods,  engineering,  research and
development  expenses  were  56% and 38% of  total  revenue,  respectively.  The
consistency  in  engineering,  research and  development  expenses is due to our
continued  emphasis  on  product  research  and  development.  The  increase  of
engineering,  research and  development  expenses as a percentage of revenues is
due to the  decrease in revenue  while such  expenses  have not  correspondingly
decreased.

SELLING AND MARKETING EXPENSES

         Selling and  marketing  expenses  for the third  quarter of fiscal year
2002 decreased to $(4) from $45 in the third quarter of fiscal year 2001. In the
third quarter of fiscal 2002 and the third  quarter of fiscal 2001,  selling and
marketing expenses were -2% and 11% of total revenue, respectively. The decrease
in the third  quarter of fiscal 2002 is a result of an  adjustment of $35 to the
reserve for bad debts.  Selling and marketing expenses for the nine months ended
December 31, 2001 increased to $569 from $535 for the nine months ended December
31, 2000. Comparing the nine-month periods,  selling and marketing expenses were
59%  and 37% of  total  revenue,  respectively.  The  increase  in  selling  and
marketing  expenses  for  the  nine-month  period  is  due  to  increased  costs
associated with the Company's attendance at an industry trade show. The increase
of selling  and  marketing  expenses as a  percentage  of revenues is due to the
decrease in revenue while such expenses have not correspondingly decreased.

GENERAL AND ADMINISTRATIVE EXPENSES

         General and  administrative  expenses  increased  to $205 for the third
quarter of fiscal year 2002 from $192 in the third  quarter of fiscal  2001.  In
the third quarter of fiscal 2002 and the third  quarter of fiscal 2001,  general
and  administrative  expenses were 100% and 46% of total revenue,  respectively.
General and administrative  expenses for the nine months ended December 31, 2001
increased  to $647  from  $527 for the nine  months  ended  December  31,  2000.
Comparing the nine-month periods,  general and administrative  expenses were 67%
and 36% of total  revenue,  respectively.  The increase is due to an increase in
personnel, bank charges related to the accounts receivable financing,  increased
legal fees and investor  relations.  The increase of

                                  Page 12 of 22
<PAGE>

general and  administrative  expenses as a  percentage  of revenue is due to the
decrease in revenue while such expenses have not correspondingly decreased.


Other income (expense)

         Other  income and expense for the first nine months of fiscal year 2002
and 2001 includes interest income and interest expense on subordinated debt.

LIQUIDITY AND CAPITAL RESOURCES

         Since  inception,  we have financed our  operations  primarily  through
sales  of  equity  securities  and  to a  lesser  extent,  cash  generated  from
operations.  During the nine  months  ended  December  31,  2001,  cash and cash
equivalents  decreased  $95 from $103 to $8. This  decrease  resulted  from cash
provided by financing  activities  of $129 less cash used by  operations of $155
and less $69 of cash used for investing  activities.  We received  approximately
$264 from the exercise of outstanding warrants and a private placement of equity
securities. A possible future source of cash for us is the potential exercise of
outstanding  warrants  if our  stock  price  were to  increase  or the  Board of
Directors chose to reprice the outstanding warrants.

         We reported an operating  loss for the nine months  ended  December 31,
2001 of  $(1,304).  At  December  31,  2001,  we had an  accumulated  deficit of
$47,768.  The  achievement  of  profitability  is primarily  dependent  upon the
continued development and commercial acceptance of our products,  the successful
management of the business and management's  ability to strategically  focus the
Company.  There can be no assurance that  profitable  operations  will occur. In
addition,  we are  experiencing  negative  cash  flow  from  operations  and may
continue to experience  negative cash flow from  operations for the remainder of
fiscal 2002 and potentially thereafter.

         Our primary  unused  sources of funds at December 31, 2001 consisted of
cash and cash equivalents of $8.

         Our operations have required substantial cash in the past, for example,
$155  during the first nine months of fiscal  2002.  Our  operations  would have
required  additional cash during the first nine months of fiscal 2002 had we not
increased our deferred pay of service  providers and employees by $290, of which
$188 was accrued  during the third  quarter.  We have been required from time to
time to defer pay for consultants and employees,  including the CEO, and we will
have to do so during  the  fourth  quarter  of fiscal  2002 if we do not  obtain
additional cash resources. This could cause employee retention issues.

         In January  2001,  we entered into an  Agreement  with our bank for the
purchase of our receivables.  The agreement provides that the bank will purchase
with  recourse up to $250 of our  domestic  accounts  receivable.  The bank will
advance us 80% of qualified receivables.  In the event that our customers do not
pay on the invoices within 90 days of invoice date, we may be required to return
the amount advanced to the bank.

         In  October  2001,  the  Company  began a private  placement  of equity
securities.  The Company completed the private placement of 878 shares of Common
Stock on December  31,  2001,  with total  proceeds  to the Company of $49.  The
shares  of  Common  Stock  are  unregistered.  The  Company  agreed  to  file  a
registration  statement with the Securities and Exchange  Commission pursuant to
the terms of the stock purchase agreement.

         The  Company  issued 780 shares of Common  Stock upon the  exercise  of
stock options, with total proceeds to the Company of $42.

         In November  2001,  the Board of Directors  approved a  proposition  to
reduce the exercise  price of all  employees'  and  consultants'  stock  options
outstanding to $0.054 per share,  the fair market value of the Company's  common
stock as of November 19,  2001.  As a result of such  modification,  all options
eligible to the offer are subject to variable plan  accounting  until the option
is exercised,  cancelled or expired.  Any future  increase in stock market price
will result in additional compensation expense.

         For the quarter and nine months ended  December  31, 2001,  the Company
recorded $35 compensation expenses related to repricing of stock options.

         We may  issue  one or more  series  of  Preferred  Stock  with  rights,
preferences, or privileges senior to those of the Common Stock. Our Common Stock
was delisted from trading on the Nasdaq National Market in November 1998 and now
trades  in  the  over-the-counter  market.  Our  ability  to  obtain  additional
financing  through the  issuance of our Common Stock or  securities

                                  Page 13 of 22
<PAGE>

convertible  into  Common  Stock  such as  Preferred  Stock  could be  adversely
affected. See "Delisting From Nasdaq; Disclosure Relating to Low-Priced Stock".

         We believe that cash and cash  generated  from  operations  will not be
sufficient  to finance  operations  through the fourth  quarter of fiscal  2002.
Management is exploring financing  alternatives to supplement our cash position.
Potential  sources of  additional  financing  include,  but are not  limited to,
private   equity   financings,   mergers,   strategic   investments,   strategic
partnerships, sale of licenses of our technology or products or various forms of
debt  financings.  There  can be no  assurance  that we will  be  successful  in
obtaining cash through our pursuit of these alternatives.  The unavailability or
timing of any financing  could prevent or delay the  continued  development  and
marketing of SVR products and services. In addition,  substantial curtailment of
our operations may be required which could result in bankruptcy.

Other Factors Affecting Future Results

Recent and  Expected  Losses;  Accumulated  Deficit.  We  incurred a net loss of
$(1,304)  for the nine months  ended  December  31, 2001 and had an  accumulated
deficit of $47,768 as of December 31, 2001. We may incur future losses. There is
no assurance  that we will generate  positive  cash flow from our  operations to
fund our growth or that we will obtain  profitability  in any future period.  To
the extent we incur losses or grow in the future,  our  operating  and investing
activities may use cash and, consequently, such losses or growth will require us
to obtain additional sources of financing in the future.

Need for Future Financing.  As described above, under Management  Discussion and
Analysis-Liquidity  and Capital  Resources,  we believe cash and cash  generated
from  operations  are not  sufficient to finance  operations  through the fourth
quarter of fiscal 2002 and we are exploring  financing and other alternatives to
supplement  our cash  position to service our current debt and any negative cash
flow from  operations.  There can be no assurance  that we will be able to raise
any cash from our pursuit of such  financing or other  alternatives  or that any
such cash we are able to raise will be on attractive  terms. The  unavailability
or timing of any financing could prevent or delay the continued  development and
marketing of SVR products and services. In addition,  substantial curtailment of
our operations may be required which could result in bankruptcy.

Going  Concern   Assumptions.   Our  independent   accountants'  report  on  our
consolidated  financial  statements as of and for the years ended March 31, 2001
and 2000  contained an  explanatory  paragraph  indicating  that our  historical
operating losses and limited capital resources raise substantial doubt about our
ability to continue as a going concern.  If we are unable to generate sufficient
cash from operations or if necessary,  raise  sufficient funds to cover the cost
of operations,  it is likely that any independent  accountant's report on future
financial statements will include a similar explanatory paragraph.

Change in Business  Model.  During the second quarter of fiscal 2001, we changed
our sales strategy to a time-based  internet  licensing  model.  We released our
Gards product on-line late in the third quarter of fiscal 2001 in December 2000.
Our SC product was released in the fourth  quarter in January  2001. We released
our Linux version of Gards late in the first quarter of fiscal year 2002.  There
can be no assurance that this new time-based  internet  licensing  model will be
successful.

Dependence  on Certain  Customers.  A small  number of  customers  account for a
significant percentage of SVR total revenue. For the first nine months of fiscal
2002,  three customers  accounted for 63% of our total revenue.  There can be no
assurance that sales to these entities,  individually or as a group,  will reach
or exceed  historical levels in any future period.  Any substantial  decrease in
sales to one or more of these customers could have a material  adverse effect on
our business, operating results or financial condition.

New  Products  and Rapid  Technological  Change;  Risk of Product  Defects.  The
Electronic Design Automation ("EDA") industry is characterized by the following:

-        extremely rapid technological change

                                  Page 14 of 22
<PAGE>

-        frequent new product introductions and enhancements
-        evolving industry standards
-        rapidly changing customer requirements.

         The   development  of  more  complex   integrated   circuits  with  new
technologies  will require more  sophisticated  design tools. The success of our
future  operations  partly depends upon our ability to enhance current  products
and to develop and introduce new products on a timely and cost-effective  basis.
Our products and services  must keep pace with  technological  developments  and
evolving  industry  standards  and   methodologies,   as  well  as  address  the
increasingly sophisticated needs of customers.  During fiscal year 2002, we will
have an aggressive new product release and current product update program,  upon
which expected revenue increases are partially based. It is possible that in the
future,  we  may  experience  delays  in new  product  development  and  product
enhancements.  We have experienced similar delays in the past. Such delays would
likely  decrease  expected  fiscal year 2002  revenues,  which could cause us to
incur losses and utilize our available cash or even run out of cash.

         In fiscal  2001,  we announced  new products  offered on the e*ECAD Web
service. However, there is no guarantee that:

-        these new products will gain market acceptance
-        we will be successful in developing and marketing product enhancements
-        we will be successful in developing  other new products that respond to
         technological change, evolving industry standards and changing customer
         requirements
-        we will not  experience  difficulties  that could  delay or prevent the
         successful development  introduction and marketing of these products or
         product enhancements
-        new  products  and  product   enhancements  will  adequately  meet  the
         requirements of the  marketplace and achieve any significant  degree of
         market acceptance

         All of our present  products operate in the Unix and/or Linux operating
systems  and we intend for all future  products to operate in the Unix and Linux
operating systems.  In the event that another operating system,  such as Windows
NT, were to achieve broad  acceptance in the EDA industry,  we would be required
to port our products.  This would be costly and time  consuming and could have a
material  adverse  effect  on  our  business,  operating  results  or  financial
condition.  If we fail  to  develop  and  introduce  new  products  and  product
enhancements in a timely and  cost-effective  manner, for technological or other
reasons,  it could also have  material  and  adverse  effects  on our  business,
operating  results and financial  condition.  Introducing or even announcing new
products by us or our  competitors,  including  new  technologies  or changes in
industry  standards  or customer  requirements,  could render some or all of our
existing products obsolete or unmarketable.  Furthermore,  customers might defer
purchases  due to the  introduction  or  announcement,  which  would also have a
material  adverse  effect  on  our  business,  operating  results  or  financial
condition.

         Complex software products,  such as those we offer, can contain defects
or even fail when  introduced  or  released.  We have,  in the past,  discovered
defects in certain of our products.  We may experience delays or lost revenue in
connection with repairs and corrections of defects found in the future. Although
to date we have not experienced material adverse effects resulting from defects,
it is possible in the future that despite  testing,  errors will go undiscovered
in new  products or releases  until after  shipment.  These errors may result in
loss of market share or failure to achieve  market  acceptance.  If this were to
occur,  it could have a material  adverse  effect upon our  business,  operating
results or financial condition.


Delisting From NASDAQ; Disclosure Relating to Low-Priced Stock. Our common stock
was delisted  from trading on the NASDAQ  National  Market on November 16, 1998.
Our common  stock  immediately  began  trading on the OTC Bulletin  Board.  As a
result,  our ability to obtain  additional  financing  through  the  issuance of
common  stock or  securities  convertible  into  common  stock may be  adversely
affected.  Investors  might  find that  disposing  of our  common  stock is more
difficult than it has been in the past. The trading price of our common stock is
currently  less

                                  Page 15 of 22
<PAGE>

than $5.00 per share.  Because our common stock falls into the category  defined
as penny  stock,  trading in the common  stock is  currently  subject to certain
rules promulgated under the Exchange Act, which require additional disclosure by
broker-dealers.  These  rules  require  us, in  advance of  trading,  to provide
investors with  disclosure  schedules,  which explain the penny stock market and
associated  risks.  The rules impose  various  sales  practice  requirements  on
broker-dealers  who sell penny stock.  Broker-dealers  engaging in some types of
these transactions must make a special suitability determination and obtain your
written  consent  prior  to  sale.   This   additional   burden  may  discourage
broker-dealers from actively  effectuating  common stock transactions,  which in
turn could have the adverse effect of severely limiting the marketability of our
common  stock.   Therefore,   the  ability  of  Silicon  Valley  Research,  Inc.
shareholders  to resell  their  stock  would be  limited.  In turn,  this  could
adversely affect our ability to obtain future equity financing.

Possible  Volatility  of Stock  Price.  The market price of our common stock has
been volatile.  The following  events could cause the market price of our common
stock to fluctuate substantially:

-        future  announcements  concerning  our  competitors  or  its  quarterly
         variations in operating results
-        the introduction of technological innovations, new products, or changes
         in product pricing policies
-        proprietary rights or other litigation, or
-        changes in earnings estimates by analysts or other factors

         The stock market has from time to time  experienced  significant  price
and volume  fluctuations that have  particularly  affected the market prices for
the common stocks of technology  companies like ours.  These  fluctuations  have
often been unrelated to the operating performance of particular companies.

         In the past,  shareholder  class action  suits have been filed  against
companies  following  periods of volatility  of stock price.  Litigation of this
nature could occur in our future.  Litigation often diverts management attention
and resources and is costly to the Company.  If we were placed in this position,
it could have a material adverse effect on our business, financial condition and
operating  results.  Significant  liabilities  are  always  possible  effects of
litigation.

Potential  Fluctuations in Quarterly  Operating  Results.  Numerous  factors may
materially and unpredictably affect our operating results, including:

-        uncertainties of the size and timing of software license fees
-        timing of co-development projects with customers
-        timing of operating expenditures
-        increased competition
-        new product announcements and releases by us and our competitors
-        gain or loss of significant customers or distributors
-        expense levels
-        renewal of maintenance contracts
-        pricing changes by us or our competitors
-        personnel changes
-        foreign currency exchange rates
-        economic   conditions   generally  and  in  the  electronics   industry
         specifically

         Any unfavorable  change in these or other factors could have a material
adverse effect on our operating  results for a particular  quarter.  Many of our
customers  order on an as-needed basis and often delay delivery of firm purchase
orders until their project  commencement  dates are determined.  As a result, we
operate with no significant backlog. Therefore,  quarterly revenue and operating
results  will  depend on the  volume and  timing of orders  received  during the
quarter, which are difficult to forecast accurately. Historically, we have often
recognized a  substantial  portion of license  revenues in the last month of the
quarter,  with these revenues  frequently  concentrated in the last two weeks of
the  quarter.  Operating  results  would  be  disproportionately

                                  Page 16 of 22
<PAGE>

affected by a reduction in revenue because only a small portion of expenses vary
with  revenue.  Operating  results  in  any  period  should  not  be  considered
indicative of the results to be expected for any future period. Our revenues may
or may not increase.

Lengthy Sales Cycle. The licensing and sale of our software  products  generally
involve a significant commitment of capital from prospective  customers.  Delays
are frequently associated with large capital expenditures and lengthy acceptance
procedures.  For these and other reasons,  the sales cycle  associated  with the
licensing  of our  products  is  typically  lengthy  and  subject to a number of
significant risks over which we have little or no control. Because the timing of
customer orders is hard to predict,  we believe that quarterly operating results
are  likely to vary  significantly  in the  future.  Actual  results  could vary
materially as a result of a variety of factors, including, without limitation:

-        the high average selling price and long sales cycle for SVR products
-        the relatively small number of orders per quarter
-        dependence on sales to a limited number of large customers
-        timing of receipt of orders
-        successful product introduction
-        acceptance of our products and increased competition

Dependence Upon Semiconductor and Electronics  Industries;  General Economic and
Market  Conditions.   Silicon  Valley  Research,  Inc.  is  dependent  upon  the
semiconductor  and, more generally,  the electronics  industries.  Each of these
industries is characterized by rapid  technological  change,  short product life
cycles,  fluctuations  in  manufacturing  capacity  and  pricing.  Each of these
industries  is highly  volatile  and has  periodically  experienced  significant
downturns.  Often in connection with, or in anticipation of, declines in general
economic conditions,  the number of new integrated circuit design projects often
decreases. Customer purchases of new licenses from us are largely dependent upon
the commencement of new design  projects.  Factors  negatively  affecting any of
these industries could have a material adverse effect on our business, operating
results or financial  condition.  Our business,  operating results and financial
condition  may in the future  reflect  substantial  fluctuations  from period to
period  due  to  patterns  and  general   economic   conditions  in  either  the
semiconductor or electronics industry.

International  Sales.  International  sales,  primarily  in  Japan  and  Taiwan,
accounted  for  approximately  3% and 5% of the total revenue in fiscal 2001 and
2000,  respectively.   Declining  revenues  from  international  sales  resulted
primarily  from closure of our Tokyo office in December  1998, and Taiwan office
in March 1999 brought about,  in part, by the reduction in capital  expenditures
by semiconductor  manufacturers,  particularly in Asia and increased competition
in the EDA software  market.  We plan for  international  sales to account for a
portion  of revenue  during  fiscal  2002,  as had been the case prior to fiscal
2000. However, this revenue involves a number of inherent risks, including:

-        economic downturn in the electronics industry in Asia
-        traditionally slower adoption of our products internationally
-        general strikes or other disruptions in working conditions
-        generally longer receivables collection periods
-        unexpected  changes in or  impositions  of  legislative  or  regulatory
         requirements
-        reduced protection for intellectual property rights in some countries
-        potentially adverse taxes and other trade barriers
-        delays  resulting  from  difficulty  in obtaining  export  licenses for
         certain technology
-        the market acceptance of a time-based licensing model

         The factors  listed above may have a material  adverse effect on future
international sales and, consequently, on operating results.

Competition.  The EDA software  market in which Silicon  Valley  Research,  Inc.
competes is intensely  competitive and subject to rapid technological change. We
currently face competition

                                  Page 17 of 22
<PAGE>

from EDA vendors, including Cadence, which currently holds the dominant share of
the market for integrated circuit physical design software, Avant! and Synopsys.
These EDA vendors have significantly greater financial,  technical and marketing
resources,  greater name recognition and a larger  installed  customer base than
us.  These  companies  also have  established  relationships  with  current  and
potential  customers  of ours  and can  devote  substantial  resources  aimed at
preventing  us  from  enhancing   relationships   with  existing   customers  or
establishing relationships with potential customers. We believe that competitive
factors in the EDA software market include:

-        product price and performance
-        support of industry standards
-        ease of use and product enhancement
-        delivery schedule
-        customer technical support and service

         Competition   from  other  EDA  companies  that  choose  to  enter  the
integrated circuit physical design market could present particularly  formidable
competition  due to their large  installed  customer  base and their  ability to
offer a  complete  integrated  circuit  design  solution.  We expect  additional
competition from other established and emerging companies.  In addition, the EDA
industry  has become  increasingly  concentrated  in recent years as a result of
consolidations,   acquisitions  and  strategic  alliances.  Accordingly,  it  is
possible that new  competitors or alliances among  competitors  could emerge and
rapidly acquire significant market share. There can be no assurance that we will
be able to compete  successfully  against current and future competitors or that
competitive pressures faced by us will not have a material adverse effect on our
business, operating results and financial condition.

Dependence on Key Personnel.  Our success depends to a significant extent upon a
number of key  technical  and  management  employees,  in  particular,  James O.
Benouis,  our President and Chief  Executive  Officer.  We do not currently have
"key man" life insurance on Mr. Benouis.  The loss of services of Mr. Benouis or
any other key employees could have a material  adverse effect on us. Our success
will depend in large part on our ability to attract  and retain  highly  skilled
technical,  managerial,  sales and  marketing  personnel.  Competition  for such
personnel is intense.  There can be no assurance  that we will be  successful in
retaining  our key  technical and  management  personnel  and in attracting  and
retaining the personnel we require in order to grow. We have had to defer salary
for Mr.  Benouis and other key  employees and expect to continue to do so during
the fourth  quarter of fiscal  2002,  which could lead them to  terminate  their
employment relationship with us.

Proprietary  Rights.  We rely on  contract,  trade secret and  copyright  law to
protect our technology. Competitors may develop similar or superior technologies
or duplicate SVR technology.  We generally enter into confidentiality or license
agreements with our employees,  distributors and customers,  and limit access to
and  distribution  of  SVR  software,   documentation   and  other   proprietary
information. Despite these precautions, it is possible for a third party to copy
or otherwise obtain and use SVR products or technology without authorization, or
to develop similar technology  independently.  In addition,  effective copyright
and trade protection may be unavailable or limited in certain foreign countries.

         There has been substantial  industry  litigation  regarding patents and
other  intellectual  property  rights  involving  technology  companies.  In the
future,  litigation  may be  necessary  to protect and enforce SVR  intellectual
property  rights,  to defend us against  claimed  infringement  of the rights of
others and to  determine  the scope and  validity of the  proprietary  rights of
others.  Any such  litigation  could be  costly  and could  divert  management's
attention,  which could have a material adverse effect on our business,  results
of  operations  or  financial  condition   regardless  of  the  outcome  of  the
litigation.  In addition, third parties making claims against us with respect to
intellectual property infringement may block our ability to sell products in the
United States and abroad,  and could result in an award of substantial  damages.
In the event of a claim of infringement,  we and our customers could be required
to obtain one or more  licenses  from third  parties.  There can be no assurance
that either us or our  customers  could  obtain  necessary  licenses  from third
parties at a reasonable cost or at all.

                                  Page 18 of 22
<PAGE>

Effect of Certain Charter Projections; Blank Check Preferred Stock. Our Board of
Directors has the  authority to issue up to 1,000 shares of preferred  stock and
to  determine  the price,  rights,  preferences,  privileges  and  restrictions,
including voting rights, without any further vote or action by shareholders. The
rights of the  holders  of the  common  stock  will be  subject  to,  and may be
adversely affected by, the rights of the holders of any preferred stock that may
be issued in the  future.  The  issuance of  preferred  stock,  while  providing
desirable  flexibility  in  connection  with  possible  acquisitions  and  other
corporate  purposes,  could  have the effect of making it more  difficult  for a
third party to acquire a majority of our outstanding voting stock.

Inflation. To date, inflation has not had a significant impact on the results of
our operations.

Recent  Accounting  Pronouncements.  In  June  2001,  the  Financial  Accounting
Standards  Board issued  Statements of Financial  Accounting  Standards No. 141,
Business  Combinations,  and No.  142,  Goodwill  and Other  Intangible  Assets,
effective  for fiscal years  beginning  after  December 15, 2001.  Under the new
rules,  goodwill and intangible  assets deemed to have indefinite  lives will no
longer be amortized but will be subject to annual impairment tests in accordance
with the Statements.  Other intangible assets will continue to be amortized over
their  useful  lives.  The Company  will apply the new rules on  accounting  for
goodwill and other  intangible  assets  beginning in the first quarter of fiscal
2003.  The  Company  has  not yet  determined  the  effect  resulting  from  the
application of the nonamortization  provisions of the Statement on the earnings.
During 2002, the Company will perform the first of the required impairment tests
of goodwill and indefinite lived  intangible  assets as of April 1, 2002 and has
not yet  determined  what the effect of these tests will be on the  earnings and
financial position of the Company.

         In December  1999,  the SEC issued  Staff  Accounting  Bulletin No. 101
("SAB 101"),  Revenue  Recognition in Financial  Statements." SAB 101 summarizes
certain of the SEC's views in applying generally accepted accounting  principles
to revenue recognition in financial  statements.  SAB 101 was adopted during the
year  ended  March 31,  2001.  The  adoption  of SAB 101 did not have a material
effect on the Company's financial position or results of operations.

ITEM 3.             Quantitative and Qualitative Disclosure about market risk

Not Applicable

                                  Page 19 of 22

<PAGE>


                           PART II. OTHER INFORMATION

Item 1.           Legal Proceedings:

                  As with  other  companies  in  industries  similar  to Silicon
                  Valley  Research,  Inc., the Company is subject to the risk of
                  adverse  claims  and  litigation  on  a  variety  of  matters,
                  including infringement of intellectual  property,  intentional
                  and/or  negligent  misrepresentation  of  material  facts  and
                  breach of fiduciary duties.

                  In March 2001,  the Company  filed suit  against a customer to
                  recover  approximately  $220,000  for  amounts  unpaid  for  a
                  license sale.  The customer has  counterclaimed  the following
                  causes of action:  breach of contract,  breach of warranty and
                  negligent misrepresentation.  On October 31, 2001, the Company
                  settled  the dispute  with its  customer.  In  exchange  for a
                  mutual  release,  the customer paid $60,000 to SVR in November
                  2001.

                  The Company  filed a complaint in the United  States  District
                  Court for the Northern  District of  California  on August 10,
                  2001 against Avant!  Corporation  and certain of its employees
                  for   unfair   competition,   tortious   interference,   false
                  advertising,   receipt  and   concealing   of  stolen   goods,
                  conspiracy and violations of federal  racketeering  laws. This
                  civil action arises out of Avant!'s theft of computer code and
                  trade secrets from Cadence Corporation and use of those stolen
                  products to compete with SVR.

                  Avant! Corporation recently was found guilty of theft of trade
                  secrets and  conspiracy  to steal and use the trade secrets of
                  Cadence  Corporation  during the period of 1991 through  1998,
                  and of having  engaged  in fraud  and  deceit in the offer and
                  sale of a security after entering a plea of no contest thereto
                  on May 16, 2001. A  restitution  award of  approximately  $195
                  million was  awarded to Cadence  Corporation  in the  criminal
                  case,  and  Cadence is  awaiting  the lifting of a stay in its
                  civil suit against Avant! Corporation.

                  The Company has  determined  it necessary  to  undertake  this
                  legal  action  in an  attempt  to  recoup  damages  caused  by
                  Avant!'s  conduct,  including  damages resulting from sales of
                  SVR  place  and  route   software   lost  directly  to  Avant!
                  Corporation.  Avant! Corporation sold place and route software
                  that contained Cadence  Corporation's stolen computer code and
                  trade  secrets head to head against SVR's  software,  and this
                  unfair  advantage  allowed  Avant!  Corporation  to  acquire a
                  significant amount of the Company's sales and market share.

                  SVR has retained David H. Donaldson,  Jr. and Peter Kennedy of
                  the  Texas  law firm of  George  &  Donaldson,  LLP and  Craig
                  Needham of the  California  firm of Needham,  Davis,  Kirwan &
                  Young, LLP to represent it in this matter on a contingency fee
                  arrangement.

                  Avant!  Corporation,  in  addition to filing its own Motion to
                  Dismiss,  has also joined  Defendant  Stephen  Wuu's Motion to
                  Dismiss,  moving  to  dismiss  each  and all of  SVR's  claims
                  against both parties. On December 14, 2001, Judge Ronald Whyte
                  heard  Avant!'s and Stephen Wuu's Motions to Dismiss,  but did
                  not make a ruling  from the  bench.  The  judge  could  make a
                  ruling  in the  future  with  no  further  input  from  either
                  parties,  or the judge could request  additional briefs and/or
                  additional  hearings in the matter before making his ruling on
                  the  Motions  to  Dismiss.   Additionally,  all  parties  have
                  stipulated  that  they  will  participate  in the  Alternative
                  Dispute Resolution  process of a private  mediation,  with the
                  mediation provider to be determined.

                  Management  believes  that  the  ultimate  resolution  of  the
                  disputes and litigation  matters discussed above will not have
                  a material adverse impact on the Company's  financial position
                  or results of operations.

                                  Page 20 of 22

<PAGE>

                  Copies  of the  court  documents  and  the  timetable  for the
                  lawsuit can be found on the SVR website at www.svri.com.

Item 2.           Changes in Securities and Use of Proceeds:

                  During the third quarter, the Company received $49,000 cash in
                  a private  placement of 878,006  shares of Common  Stock.  The
                  private  placement relied upon the exemption from registration
                  provided  by Section  4(2) of the  Federal  Securities  Act of
                  1933, as amended. No underwriters were employed.

                  The Company  issued  780,740  shares of Common Stock valued at
                  $42,160 upon the exercise of stock options.

Item 3.           Defaults Upon Senior Securities: Not Applicable

Item 4.           Submission  of Matters to a Vote of  Securities  Holders:  Not
                  Applicable

Item 5.           Other Information: Not Applicable

Item 6.           Exhibits and Reports on Form 8-K:

                                  (A) Exhibits:

Exhibit
Number        Description of Exhibit

(a)(1)   The  financial  statements  filed as part of this  Report at Item 1 are
         listed in the Index to Financial  Statements  and  Financial  Statement
         Schedules on page 2 of this Report.

(a)(2)   The  following  exhibits are filed with this  Quarterly  Report on Form
         10-QSB:

3.01     Registrant's Articles of Incorporation as amended to date (incorporated
         by reference to Exhibit 3.01 of Registrant's  Registration Statement on
         Form S-1 (File No. 2-89943) filed March 14, 1984, as amended (the "1984
         Registration Statement")).

3.02     Registrant's   amendment   to  Amended   and   Restated   Articles   of
         Incorporation   (incorporated   by   reference   to  Exhibit   3.02  of
         Registrant's  Quarterly  Report  on Form  10-Q  for the  quarter  ended
         September 30, 1998).

3.03     Registrant's  bylaws, as amended to date  (incorporated by reference to
         Exhibit 4.01 of the 1984 Registration Statement).

3.05     Amendment to Bylaws dated November 12, 1996  (incorporated by reference
         to Exhibit 3.04 of Registrant's  Quarterly  Report on Form 10-Q for the
         quarter ended December 31, 1996).

10.02    Form of Stock  Purchase  Agreement  among the  Company  and an investor
         dated as of October 1, 2001.


                            (B) Reports on Form 8-K:

No Reports on Form 8-K were filed during the quarter covered by this report.

                                  Page 21 of 22

<PAGE>


                                    SIGNATURE





Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.


                                              SILICON VALLEY RESEARCH, INC.





Date:       February 19, 2002                  /s/ James O. Benouis
            -----------------                  ---------------------------------
                                               James O. Benouis
                                               President and
                                               Chief Executive Officer


                                               (Chief Financial and Accounting
                                               Officer)

                                  Page 22 of 22